US Treasury Secretary John Snow said on Friday China needs to act "soon" to let its yuan currency become more flexible and he will tell Chinese officials that in person next week.
In an interview on CNBC television, Snow said China made "an important first step" in July in ending its peg between the yuan and the dollar.
"The Chinese government in July made an important first step but a lot more needs to be done," Snow said.
"They need to continue to build on that step and do as they said they would do an let market forces work, let demand and supply in currency markets determine the value of the yuan," he added.
In July, China ended its policy of pegging the yuan, also known as the renminbi or RMB, at 8.28 to the dollar, revaluing it by 2.1 percent and moving to a managed float with reference to a basket of currencies.
But it has appreciated little since that time and, once again, criticism is being raised by US lawmakers and manufacturers who claim Chinese-made imports are effectively undervalued because its currency is not permitted to appreciate to fully reflect its strong market position.
Snow is to visit Japan and China next week and will meet senior Chinese government officials. "I will certainly, I can assure you, press them forward on that issue when I'm there next week."
In a separate interview on Bloomberg Television, Snow indicated the Bush administration sought additional leverage in its calls for Chinese authorities to let the yuan appreciate more by enlisting the help of the International Monetary Fund.
"The IMF is the agency responsible for global surveillance and they have a real responsibility to step forward here and I will be mentioning that in conversations later with the managing director, Rodrigo Rato," Snow said. He leaves for Japan on Saturday and will arrive in China on Tuesday, making stops in Shanghai and Chengdu before arriving in Beijing a week from today.
The US Treasury chief is attending a meeting of Group of 20 finance ministers and central bankers on the outskirts of Beijing next weekend, but will hold a series of one-on-one meetings on the sidelines with Chinese and other officials.
Snow said on CNBC that he was confident China will act to permit more yuan flexibility - "I remain confident the Chinese are as good as their word"- but: "I want to press them on it, though, and let them know the importance of them moving soon." "We need to see action." he added, without saying whether he will propose a specific action or what it might be.
On Bloomberg TV, Snow was asked if the United States will consider imposing trade sanctions against China if it resists further moves to let the yuan's value to rise.